Correspondent|In a move that borders on corruption the Hwange Colliery Company Limited (HCCL) board has agreed to ‘sell’ two million tonnes of coal fines to Woolwork Investments (Pvt) Ltd at a massive $8 million discount in exchange for vehicles for its executive officials and equipment.
Investigations show that instead HCCL could have raised $28 million if it had sold the coal fines at the current market price of $14 per tonne.
Industry sources also said HCCL could have even raised over $30 per tonne by beneficiating the coal fines through briquetting, a project that Woolwork are pursuing.
Internal sources said Woolwork, a subsidiary of Croco Motors, will receive the coal at a huge 29 % discount as it has to provide vehicles and equipment valued at $20 million.
Sources said the terms of the agreement are so favourable for Woolwork and can be viewed as another example of corruption and unethical practices within the ailing HCCL.
The company is not receiving any advanced payment from Woolwork, which in normal circumstances would justify a discount.
Secondly, Woolwork does not have to provide the prices of the vehicles and equipment it will provide, essentially meaning the goods may not even reach the agreed upon $20 million value.
Another surprising aspect in the deal is there is no provision of timelines for Woolwork to provide the vehicles and equipment, essentially meaning non-delivery could continue indefinitely.
HCCL reportedly has accumulated a coal stockpile of about 345 000 tonnes and according to the source had recently put up a tender for the beneficiation of coal.
A partner was found willing to invest $5,5 million in a briquetting plant but this was put on hold, which sources say, was meant to pave way for the Woolwork deal.
“This deal is another dubious decision by senior executives at the company as Woolwork could have applied for the tender when it was offered,” the source said.
The Mail and Telegraph reported this week that infighting between senior management and the board has highlighted the rot at the very top of Zimbabwe’s largest coal company.
Providing a questionable discount as HCCL is failing not only to repay its creditors but also pay its employees maybe indicative of the culture of “unethical business practices characterised by financial improprieties.”
The Zimbabwe Independent reported earlier this month that the mining company had been paying its workforce 50% of their salaries since the beginning of last year and in June the company paid 7 % of the employees’ 36 months outstanding dues.
Also this month the Herald reported HCCL had defaulted on a “Scheme of Arrangement” it entered into with creditors to manage its $352 million debt. Under this scheme employees were to receive a monthly payment, but reportedly the company is $7,6 million in arrears, owing a total of $4,6 million to its employees for the past two months.
M&T